Risk management holds back Estonian projects

A report by the Estonian National Auditor shows that seven out of 18 local urban road projects he analyzed had poor risk management systems in place.

The projects, completed between 2019 and 2021, also lacked well-defined initial studies of the impact any road design could have on surrounding neighborhoods, according to national media on the auditor’s work.

During the construction period, a common shortcoming was poor documentation of what work had been completed and why it was changed later as work progressed. This extra work was time consuming for the project schedule and for the euro taxpayer, the report from the country’s National Court of Auditors notes. It was therefore unclear why it was decided to alter the original designs during construction and what necessitated these changes.

Because initial studies, including detailed information on buried obstacles, were poor, many projects had to be stopped when these objects – gas pipes, pipelines, buried cables – were discovered. This significantly increased the costs of the project.

“As customers, local governments sometimes rely too much on the expertise and goodwill of their contractual partners,” said Janar Holm, Auditor General of Estonia. “As a result, the requirements of the designer, builder or client in the contracts remain general or do not verify that these requirements are met.”

According to the Court of Auditors, the association of towns and rural municipalities should establish standard conditions both for the technical description of the works and for the contracts, then put them online and keep them up to date.

The National Audit Office has also called for closer oversight of the country’s larger, more expensive projects by the National Transport Board. It was acknowledged, however, that the council had already started down this path in the second half of 2019 and has inspected 10-15 sites a year since then. More than half of these inspections revealed a few defects, most often an insufficiently thick support.

But the projects to be considered by the council were chosen at random, a method which is not in the best interest of the taxpayer, according to the auditor. A more systematic approach is needed.

In 2021, there were about 23,300 km of local roads in Estonia, of which about three quarters were outside cities, towns and small towns. However, the traffic load on local roads is largely concentrated in the immediate urban areas, where half of the streets have a traffic frequency of at least 2,000 cars per day. Outside the settlements, around 90% of the roads have less than 500 cars per day.

The local governments audited were Tallinn, City of Tartu, Municipality of Lääne-Harju, City of Rakvere, Kohtla-Järve, Municipality of Märjamaa, Municipality of Luunja, Municipality of Rõuge, Municipality of Tori and Municipality of Viimsi. The projects varied in value, from 70,000 to 1.5 million euros.

Between 2019 and 2021, local governments spent around €170 million per year on road maintenance, of which 57% was spent on road construction and surface repair

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